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Relative valuation derived from Energy sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 38.7GRADE D
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
33.1%
Sector: 6.7%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Borr Drilling Ltd (BORR) receives a "Hold" rating with a composite score of 54.2/100, ranked #165 out of 4446 stocks. Key factor scores: Quality 39/100, Value 74/100, Momentum 89/100. This is quantitative analysis only — not investment advice.
Borr Drilling Ltd (BORR) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Borr Drilling Ltd Do?
Borr Drilling Limited operates as an offshore drilling contractor to the oil and gas industry worldwide. It owns, contracts, and operates jack-up rigs for operations in shallow-water areas, including the provision of related equipment and work crews to conduct oil and gas drilling and workover operations for exploration and production. The company serves oil and gas exploration and production companies, such as integrated oil companies, state-owned national oil companies, and independent oil and gas companies. As of December 31, 2021, it operated a fleet of 23 jack-up drilling rigs. The company was formerly known as Magni Drilling Limited and changed its name to Borr Drilling Limited in December 2016. Borr Drilling Limited was incorporated in 2016 and is based in Hamilton, Bermuda. Borr Drilling Ltd (BORR) is classified as a small-cap stock in the Energy sector, specifically within the Petroleum And Natural Gas industry. The company is led by CEO Patrick Schorn and employs approximately 520 people. With a market capitalization of $1.8B, BORR is one of the notable companies in the Energy sector.
Borr Drilling Ltd (BORR) Stock Rating — Hold (April 2026)
As of April 2026, Borr Drilling Ltd receives a Hold rating with a composite score of 54.2/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.BORR ranks #165 out of 4,446 stocks in our coverage universe. Within the Energy sector, Borr Drilling Ltd ranks #29 of 128 stocks, placing it in the top quartile of its Energy peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
BORR Stock Price and 52-Week Range
Borr Drilling Ltd (BORR) currently trades at $5.90. The stock lost $0.03 (0.5%) in the most recent trading session. The 52-week high for BORR is $6.18, which means the stock is currently trading -4.5% from its annual peak. The 52-week low is $1.55, putting the stock 280.6% above its annual trough. Recent trading volume was 5.9M shares, reflecting moderate market activity.
Is BORR Overvalued or Undervalued? — Valuation Analysis
Borr Drilling Ltd (BORR) carries a value factor score of 74/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 17.97x, compared to the Energy sector average of 19.63x — a discount of 8%. The price-to-book ratio stands at 1.85x, versus the sector average of 1.64x. The price-to-sales ratio is 0.46x, compared to 0.47x for the average Energy stock. On an enterprise value basis, BORR trades at 2.14x EV/EBITDA, versus 3.50x for the sector.
Based on these multiples, Borr Drilling Ltd appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
Borr Drilling Ltd Profitability — ROE, Margins, and Quality Score
Borr Drilling Ltd (BORR) earns a quality factor score of 39/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is 33.1%, compared to the Energy sector average of 6.7%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 9.6% versus the sector average of 3.7%.
On a margin basis, Borr Drilling Ltd reports gross margins of 100.0%, compared to 52.7% for the sector. The operating margin is 37.0% (sector: 10.7%). Net profit margin stands at 8.1%, versus 6.4% for the average Energy stock. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
BORR Debt, Balance Sheet, and Financial Health
Borr Drilling Ltd has a debt-to-equity ratio of 212.0%, compared to the Energy sector average of 55.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. Total debt on the balance sheet is $2.11B. Cash and equivalents stand at $62M.
BORR has a beta of 1.49, meaning it is more volatile than the broader market — a $10,000 investment in BORR would be expected to move 49.0% more than the S&P 500 on any given day. The stability factor score for Borr Drilling Ltd is 34/100, suggesting elevated price swings that may be unsuitable for conservative portfolios.
Borr Drilling Ltd Revenue and Earnings History — Quarterly Trend
In TTM 2026, Borr Drilling Ltd reported revenue of $1.01B and earnings per share (EPS) of $0.33. Net income for the quarter was $82M. Gross margin was 100.0%. Operating income came in at $374M.
In FY 2024, Borr Drilling Ltd reported revenue of $1.01B and earnings per share (EPS) of $0.33. Net income for the quarter was $82M. Gross margin was 100.0%. Revenue grew 31.0% year-over-year compared to FY 2023. Operating income came in at $374M.
In FY 2023, Borr Drilling Ltd reported revenue of $772M and earnings per share (EPS) of $0.09. Net income for the quarter was $22M. Gross margin was 100.0%. Revenue grew 73.9% year-over-year compared to FY 2022. Operating income came in at $250M.
In FY 2022, Borr Drilling Ltd reported revenue of $444M and earnings per share (EPS) of $-1.64. Net income for the quarter was $-293M. Gross margin was 100.0%. Revenue grew 80.9% year-over-year compared to FY 2021. Operating income came in at $-102M.
Over the past 8 quarters, Borr Drilling Ltd has demonstrated a growth trajectory, with revenue expanding from $165M to $1.01B. Investors analyzing BORR stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
BORR Dividend Yield and Income Analysis
Borr Drilling Ltd (BORR) does not currently pay a dividend. This is common among smaller companies in the Petroleum And Natural Gas industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Energy dividend stocks may want to explore other Energy stocks or use the stock screener to filter by dividend yield.
BORR Momentum and Technical Analysis Profile
Borr Drilling Ltd (BORR) has a momentum factor score of 89/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 31/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 29/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
BORR vs Competitors — Energy Sector Ranking and Peer Comparison
Comparing BORR against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full BORR vs S&P 500 (SPY) comparison to assess how Borr Drilling Ltd stacks up against the broader market across all factor dimensions.
BORR Next Earnings Date
No upcoming earnings date has been announced for Borr Drilling Ltd (BORR) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy BORR? — Investment Thesis Summary
Borr Drilling Ltd presents a balanced picture with arguments on both sides. The quality score of 39/100 flags below-average profitability. The value score of 74/100 suggests attractive pricing relative to fundamentals. Price momentum is positive at 89/100, suggesting the trend favors buyers. High volatility (stability score 34/100) increases portfolio risk.
In summary, Borr Drilling Ltd (BORR) earns a Hold rating with a composite score of 54.2/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on BORR stock.
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Institutional Research Dossier
Borr Drilling Ltd (BORR) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Borr Drilling Ltd (BORR) receives a Hold rating, justified by a balanced assessment of its strong operational performance in a recovering jack-up rig market against a backdrop of significant debt and negative free cash flow. While the company exhibits compelling valuation metrics relative to its sector and demonstrates impressive revenue growth, its financial stability concerns and short interest levels temper enthusiasm, warranting a neutral stance.
The core takeaway is that Borr Drilling presents a high-beta, high-reward, high-risk investment opportunity. Its operational leverage to rising day rates in the shallow-water drilling market is undeniable, but its substantial debt burden and inconsistent cash flow generation necessitate caution. Investors should closely monitor the company's ability to deleverage and sustain positive free cash flow in the coming quarters to reassess the investment thesis.
Business Strategy & Overview
Borr Drilling operates as an offshore drilling contractor, focusing on the jack-up rig market, which caters to shallow-water oil and gas exploration and production. The company's strategy centers on owning, contracting, and operating a fleet of modern, high-specification jack-up rigs. These rigs are deployed globally, serving a diverse clientele including integrated oil companies, national oil companies, and independent oil and gas producers. Borr Drilling's revenue is primarily derived from day rates charged for the use of its rigs and associated services, such as drilling and workover operations.
The company's strategic positioning is predicated on the belief that the jack-up rig market is undergoing a cyclical recovery, driven by increased demand for shallow-water drilling activities. This recovery is fueled by factors such as the depletion of existing shallow-water reserves, the relative cost-effectiveness of shallow-water projects compared to deepwater, and the need for energy security in various regions. Borr Drilling aims to capitalize on this trend by maintaining a young and technologically advanced fleet, which allows it to command premium day rates and secure long-term contracts.
Borr Drilling's operational focus is on maximizing rig utilization and minimizing downtime. This involves proactive maintenance, efficient crew management, and a strong safety culture. The company also emphasizes building strong relationships with its clients, providing customized solutions, and delivering reliable performance. Furthermore, Borr Drilling actively manages its rig portfolio, selectively acquiring or disposing of rigs to optimize its fleet composition and geographic footprint.
The competitive landscape for Borr Drilling includes other jack-up rig operators, such as Valaris, Noble Corporation, and Shelf Drilling. Competition is primarily based on rig specifications, day rates, operational performance, and geographic presence. Borr Drilling differentiates itself through its modern fleet, its focus on high-specification rigs, and its commitment to operational excellence. The company's ability to secure and maintain long-term contracts is crucial for its financial performance and stability.
Execution Benchmarks audit
Gross Margin
Core pricing power
100.0%
Sector: 52.7%
+90% VS SCTR
Economic Moat Analysis
Borr Drilling's economic moat is best characterized as Narrow. While the company benefits from certain advantages in the jack-up rig market, these are not substantial enough to create a wide and enduring competitive edge. The primary source of Borr Drilling's narrow moat lies in its modern, high-specification fleet of jack-up rigs. These rigs are equipped with advanced technology and are capable of operating in harsh environments, allowing Borr Drilling to command premium day rates and attract clients seeking reliable and efficient drilling services.
However, the jack-up rig market is inherently cyclical and competitive. Rig specifications can become outdated over time, requiring ongoing investment in upgrades and maintenance. Furthermore, new entrants can acquire or build modern rigs, eroding Borr Drilling's technological advantage. The industry is also subject to fluctuations in oil and gas prices, which can significantly impact demand for drilling services and day rates.
Borr Drilling does not possess significant network effects or switching costs. Clients can easily switch between different rig operators based on price, availability, and rig specifications. The company's intangible assets, such as its brand reputation and operational expertise, provide a modest advantage, but these are not insurmountable barriers to entry for competitors. While Borr Drilling may achieve some cost advantages through efficient operations and economies of scale, these are not substantial enough to create a significant competitive edge.
Efficient scale is not a major factor in the jack-up rig market. While larger rig operators may benefit from economies of scale in procurement and administration, the market is fragmented and regionalized, allowing smaller players to compete effectively. Overall, Borr Drilling's narrow moat is primarily based on its modern fleet and operational expertise, but it is vulnerable to technological obsolescence, cyclical downturns, and competition from other rig operators.
Financial Health & Profitability
Borr Drilling's financial health presents a mixed picture. The company has demonstrated impressive revenue growth in recent years, increasing from $245.30 million in FY2021 to $1.01 billion in FY2024. This growth reflects the recovery in the jack-up rig market and Borr Drilling's ability to secure contracts and increase rig utilization. The company's gross margin has consistently been 100.0% across all reported years, which is unusual and warrants further investigation to understand the accounting practices driving this result. Operating margin has improved significantly, from -36.0% in FY2021 to 37.0% in FY2024, indicating improved operational efficiency and cost control.
However, Borr Drilling's profitability remains a concern. While the company reported a net income of $82.10 million in FY2024, this follows several years of substantial net losses. The company's free cash flow has been volatile, with negative free cash flow of $-228.83 million in FY2024 and $-29.66 million in FY2023, following positive free cash flow in FY2022 and FY2021. This inconsistent cash flow generation raises concerns about the company's ability to fund its operations and service its debt.
Borr Drilling's balance sheet is heavily leveraged. As of the latest data, the company has total debt of $2.11 billion and total cash of only $61.60 million. The debt-to-equity ratio is a very high 212.00, significantly above the sector average of 55.00. This high level of debt increases the company's financial risk and limits its flexibility to invest in growth opportunities or weather downturns in the market. The current ratio is not available, preventing a full assessment of short-term liquidity.
Compared to the sector, Borr Drilling exhibits a higher ROE (33.1% vs. 6.9%), a higher operating margin (37.0% vs. 10.6%), and a higher net margin (8.1% vs. 6.3%). However, the company's high debt levels and inconsistent cash flow generation offset these positive attributes. The company's financial health is contingent on its ability to sustain revenue growth, improve profitability, and generate consistent free cash flow to deleverage its balance sheet.
Valuation Assessment
Borr Drilling's valuation presents a compelling case for value investors, but requires careful consideration of its financial health. The company's P/E ratio of 14.2x is significantly lower than the sector average of 19.5x, suggesting that the stock is undervalued relative to its earnings. Similarly, its EV/EBITDA ratio of 1.9x is substantially below the sector average of 3.5x, further indicating undervaluation based on its enterprise value and operating performance.
However, these valuation metrics must be interpreted in the context of Borr Drilling's high debt levels and inconsistent cash flow generation. While the company's earnings and EBITDA may appear attractive, its substantial debt burden reduces the intrinsic value of the equity. The negative free cash flow further complicates the valuation picture, as it suggests that the company may need to raise additional capital or refinance its debt in the future.
Compared to its historical performance, Borr Drilling's current valuation appears reasonable. The company's revenue has grown significantly in recent years, and its profitability has improved. However, its past financial struggles and high debt levels warrant caution. The stock's valuation is contingent on the company's ability to sustain its revenue growth, improve its profitability, and generate consistent free cash flow to deleverage its balance sheet.
Overall, Borr Drilling's valuation can be considered cheap relative to its sector and its potential for future growth. However, the company's high debt levels and inconsistent cash flow generation create significant risks. Investors should carefully weigh the potential upside against the downside risks before investing in Borr Drilling. A discounted cash flow analysis, incorporating conservative assumptions about future growth and cash flow generation, would be necessary to arrive at a more precise valuation.
Risk & Uncertainty
Borr Drilling faces several specific, idiosyncratic risks that could negatively impact its business and financial performance. The most significant risk is its high level of debt. The company's substantial debt burden increases its financial risk and limits its flexibility to invest in growth opportunities or weather downturns in the market. A decline in oil and gas prices or a decrease in demand for jack-up rigs could make it difficult for Borr Drilling to service its debt, potentially leading to financial distress or bankruptcy.
Another key risk is the cyclical nature of the jack-up rig market. Demand for drilling services is highly correlated with oil and gas prices, which are subject to significant volatility. A prolonged period of low oil and gas prices could reduce demand for jack-up rigs, leading to lower day rates and reduced rig utilization. This would negatively impact Borr Drilling's revenue and profitability.
Competition is also a significant risk. The jack-up rig market is competitive, with several other rig operators vying for contracts. Increased competition could lead to lower day rates and reduced rig utilization, negatively impacting Borr Drilling's financial performance. Furthermore, technological obsolescence is a risk. Rig specifications can become outdated over time, requiring ongoing investment in upgrades and maintenance. Failure to keep its fleet modern and competitive could reduce Borr Drilling's ability to command premium day rates and secure long-term contracts.
Finally, regulatory and environmental risks are present. Offshore drilling operations are subject to strict regulations and environmental standards. Changes in regulations or increased scrutiny of environmental impacts could increase Borr Drilling's operating costs and limit its ability to operate in certain regions. Any major environmental incident involving one of Borr Drilling's rigs could result in significant liabilities and reputational damage.
Bulls Say / Bears Say
The Bull Case
BULL VIEWThe jack-up rig market is in the early stages of a sustained recovery, and Borr Drilling's modern fleet positions it to capture significant market share and benefit from rising day rates.
BULL VIEWBorr Drilling's operational improvements and cost-cutting measures will drive significant margin expansion and free cash flow generation, allowing the company to deleverage its balance sheet and unlock substantial shareholder value.
BULL VIEWThe company's strong relationships with major oil and gas companies and its proven track record of operational excellence will enable it to secure long-term contracts and maintain high rig utilization rates.
The Bear Case
BEAR VIEWBorr Drilling's high debt levels and negative free cash flow make it vulnerable to a downturn in the jack-up rig market, potentially leading to financial distress or bankruptcy.
BEAR VIEWThe jack-up rig market is inherently cyclical and competitive, and increased competition could lead to lower day rates and reduced rig utilization, negatively impacting Borr Drilling's financial performance.
BEAR VIEWThe company's reliance on a limited number of clients and geographic regions exposes it to concentration risk, and any disruption in these relationships or regions could significantly impact its revenue and profitability.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score BORR and 4,400+ other equities.
Borr Drilling Ltd exhibits a 9% valuation discount relative to institutional benchmarks. This represents a balanced risk/reward profile based on current multiples.
Return on Assets
Efficiency of asset utilization
9.6%
Sector: 3.7%
Gross Margin
Pricing power and cost efficiency
100.0%
Sector: 52.7%
Operating Margin
Core business profitability
37.0%
Sector: 10.7%
Net Margin
Bottom-line profitability
8.1%
Sector: 6.4%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
